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SECURE Act 2.0: What Every University Professional Needs to Know Before 2026

Since the SECURE Act 2.0 was enacted in 2022, a series of updates have been introduced to enhance retirement savings opportunities, modernize plan rules, and broaden access to retirement programs. The next round of changes, scheduled for 2026, focuses on catch-up contributions for high-income earners. These updates will affect university professionals by changing tax and retirement planning for their future catch-up contributions.

Elective Deferrals to 401(a), 403(b), and 457 Plans

Employee retirement plan contributions are categorized as follows:

Pre-tax (Traditional) Contributions:

  • These contributions defer taxes on wages and provide a tax deduction in the year they are contributed, effectively reducing taxable income for that year.
  • For high-income earners, pre-tax deductions have traditionally helped shield income from higher tax brackets and defer taxes on distributions until retirement. Both the principal and its growth are tax-deferred, meaning the entire distribution is taxed at the individual’s marginal income tax rate when withdrawn.

Roth (After-tax) Contributions:

  • Roth contributions are taxed in the year they are made and do not reduce taxable income. Because taxes are paid upfront, Roth contributions grow tax-free, and qualified withdrawals, both principal and earnings, are distributed without any tax consequences.

In 2025, the basic elective deferral limit for a 403(b), 401(a), and 457 plan is $23,500. It rises to $24,500 in 2026.

Catch-Up Contributions:

  • Individuals aged 50 and older can make an additional elective contribution beyond the standard annual limit.
  • In years prior to 2026, these catch-up contributions could be made as pre-tax or as Roth, depending on the election of the employee and the availability in the plan.
  • If a plan does not offer Roth contributions, it must prohibit catch-up contributions for high-income earners unless it adds a Roth feature.

In 2025, the catch-up contribution is $7,500. This will increase to $8,000 in 2026.

“Super Catch-Up” Contributions:

  • The SECURE Act 2.0 allows a temporary “super catch-up” for individuals aged 60 to 63. Eligible individuals can contribute the greater of $10,000 or 150% of the current year’s normal catch-up contribution.
  • This provision is also effective January 1, 2025, and applies to 401(k), 403(b), and governmental 457(b) plans.
  • These contributions help individuals late in their careers to further boost their retirement savings beyond the standard catch-up limits. For eligible university professionals, this provision may offer an opportunity to increase retirement savings, provided cash flow permits.

The Change

The SECURE Act 2.0 impacts university professionals’ retirement and tax planning primarily through changes to catch-up contributions. Beginning in 2026, individuals aged 50 or older who earned more than $145,000 in FICA wages, not total compensation, from their employer in the previous year must make all catch-up contributions as Roth.

What does this mean for tax and retirement planning? Eligible individuals will no longer have a choice in the tax treatment of these contributions. On one hand, this increases taxable income for the year by the catch-up amount. On the other hand, it builds tax-free savings for use in retirement, enhancing diversification across tax buckets and providing greater flexibility for future distributions.

For university professionals, retirement plan sponsors must communicate and implement these changes. Understanding how this shift affects long-term tax and retirement strategies is essential for creating a healthy financial plan.

Wise Counsel for University Professionals

Our advisors have specific and in-depth knowledge about university employee benefit programs and retirement plans. We work with university faculty, physicians, and other professionals. We are not associated with any university or any retirement vendor, and we have no access to your private retirement or personnel information.

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